Do you feel like you’re on a continuous uphill treadmill with your sales results not giving you the rewards you want for all your efforts?
Well, you are not alone. As with most business owners, particularly small business owners, owning your own business is not easy because where you thought you would be the boss with a lot of freedom, you actually found a much more demanding boss who works around the clock. of the day, 7 days a week. of your time, your resources and a lot of effort. Your business is now your boss and he is quite the dictator!
Sometimes you feel like giving up and throwing in the towel. Your stress increases and you are likely to continue to wonder why you don’t have more money in the bank. After all, your turnover is covering your overhead with some profit…so there must be something you’re missing…or maybe you’re doing something wrong.
Furthermore, the price of your product or service plays a very important role in determining the success of a sale. You don’t have to be the cheapest either. Ideally, your price should be positioned between the market-related price and the maximum resistance price of the market. It is the added value that it includes that will justify its price and determine where it will fit.
When pricing your product or service, you should always have a goal in mind. Knowing your goal will have a significant impact on the final price you set. Naturally, the ultimate goal of your price is to make as much money as you can. However, which route do you want to follow? Want…
- Low price to penetrate the market and win customers; gold
- High price for maximum profit; gold
- Low price to eliminate your competition; gold
- Price for ‘normal’ profit; gold
- Price to be competitive; gold
- Price for maximum profit and maximum sales.
When setting your final price, it’s easy to calculate the first part of your price structure, that is, the known cost of material, but what about the overhead costs that make up an integral part of the balance of your price structure?
Well, we’re going to help you calculate your overhead correctly. Here’s the missing link… no doubt you’re calculating your sales targets based on having 365 days a year to trade. Well here’s the problem, you don’t have 365 days in a year to open your doors for business, even a restaurant only has 363 days in a year, normally. So what if you have a seasonal business, where you only have 182 days in a year to trade. You still have to carry your overhead for the rest of the year to stay in business.
And… are you calculating your hourly rate correctly as a consultant or inserting the correct overhead rate for a bid?
The secret lies in setting your sales goals based on the number of days you can stay open for business.
Once you’ve set your target correctly, you’ll be able to use the actual cost of overhead to price your products or services correctly to ‘play’ the market with confidence.
You’ll also be surprised at how much your stress levels will drop and how much more relaxed you’ll become about your business. Soon you will be able to focus more on ‘working ON your business instead of working ON your business’.